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Agency of the Month examines the many important facets of government agencies. Each month, Federal News Radio speaks with top executives from a specific agency about the issues most important to its mission. The Agency of the Month for October 2012 - the Health and Human Services Department.

National Cancer Institute feels the budget pinch

Oct. 3, 2012 - Agency of the Month

It sounds backwards for an agency to lose spending power after its budget is doubled, but that's the situation faced by the National Institutes of Health.

Despite its budget being doubled in the early 2000s, NIH is having a hard time keeping up with medical inflation. The National Cancer Institute, a sub-agency within NIH, is also dealing with the nature of research grants.

"That is the heart of the leadership challenge," said John Czajkowski, deputy director for management at the National Cancer Institute, in an interview on Federal News Radio's Agency of the Month show. "Our spending power is less than it was a decade ago."

The institute also faces a constant battle of doing more with less in awarding research grants.

"When a grant is issued in many cases it is a multi-year commitment," said Czajkowski. "There are inflationary increases built in, in many cases... As those dollars out the door continue to increase but our budget doesn't increase with it, it erodes so many of those activities that are ongoing."

It's putting a fiscal pinch not only on NCI and NIH as a whole, but also the universities and independent research groups that rely on government funding to do business. So, NCI is prioritizing its investments to get the best value for both cancer research and the agency's budget.

"You can imagine that you're getting an excellent proposal for something you're already doing," said Czajkowski. "So, while it may be an excellent application from a high-performing organization, it might not represent a good value for NCI and cancer research."

NCI is using innovation to stay ahead of its financial challenges. In September 2011, the agency leveraged the 30-year-old Small Business Innovative Research grants to award millions of dollars to small businesses for cancer research. The NCI also weighs grant proposals against what might be popular research fields and what's new.

"You may get a proposal from a less prestigious organization but the idea is interesting," said Czajkowski. "You have to consider all those different factors and weigh them against each other based on the proposals you have in front of you."

Sequestration: "A Daunting Scenario"

If sequestration affects NCI's budget, it would have an immediate impact on universities and research organizations that directly rely on the agency's grants, Czajkowski added. Roughly 60 percent of the entire NCI budget is dedicated to research grants.

"It goes without saying that sequestration is a pretty daunting scenario," said Czajkowski. "Most of us, I think, are confident that an alternative to sequestration will be agreed to and that we can avoid the fiscal cliff."

Despite a positive outlook, NCI is still making plans to respond appropriately if sequestration does indeed come to pass Jan. 2.

Czajkowski said the agency is taking inventory of programs that can be scaled down and trying to find ways to keep a balanced research program the centerpiece of the NCI budget.

"We also have a sizeable intramural research program here," said Czajkowski. "Insuring that all the different parts of our portfolio are viable through a transition like sequestration, to me, is clearly the goal of the leadership team here at NCI."

But, overall, the National Cancer Institute is confident that sequestration won't cripple the agency.

"Most people can agree that ending suffering and death due to disease should remain a priority for this country and that cutting back on funding will affect communities all across America," said Czajkowski.